We previously reported that Indiana employers could expect an increase in not only unemployment taxable wage base (going from $7,000 to $9,500), but tax rate as well (changing from a range of 1.1% to 5.6% in 2009 to 0.7% to 9.5% in 2010.)

Some recent activity in the state senate however could give Indiana employers a break, at least in 2010.  Lawmakers are proposing a delay in the unemployment insurance tax increases to give business owners a break and hopefully encourage new job growth in the state.

While I wholeheartedly agree with a delay in the tax increases, it appears that certain lawmakers may be banking on a bailout of state unemployment insurance funds as the rationale for why a delay could make sense. 

It is interesting given the position that the Nevada Economic Security Council took when they considered reducing the tax on employers in 2010 and statements made by South Carolina Board of Economic Advisors Chairman, John Rainey.  (See my previous blog "What would happen if interest was waived...?")  These state advisors took the position that the federal loans had to be repaid or employers would end up paying more later.

In my heart I don't believe in government bailouts, however, it has been a practice for so long that is has come to be expected (as evidenced by comments made by Indiana lawmakers).  We have created a situation where there is almost no longer a choice in whether to bailout a sector of the economy or not. 

So, if there is any thought by federal lawmakers out there that a bailout of the trust funds could happen, I wish they would just go ahead and do it so employers in all states could possibly benefit from some relief. 

We'll keep a close watch on what happens in Indiana, but don't expect a decision quickly.  The delay won't be discussed until the next Senate session in January. 

Tammy Mullin